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stock picking site
- Thread starter 10K
- Start date
Yes the net for the day in my earlier example would have been -$0.20 not -.70 my error- but the point is still proven. The guy who just blatanlty buys 1000 shares on each trade is still a loser in this scenario.
If you were in their room- you would realize they use voalatility/pivot based stops.... so in essence a $50 stock trade would not be called with a $.50 stop loss...... a stock with a $25 price might though. An example is right now we are long DRI with a $1.20 stop...earlier in the week we were short dell with about a $.50 stop.
The bottom line is that the lower and tighter stops don't have to move as much to stop us out price wise- but they also don't have to move as much in our direction to get us the 2-1 we are lookinig for. You guys can bag it all you want, but it is the one site next to PT that has actually made me money consistently! I tried M-T lost money....tried alfatrading....lost money etc etc etc
You guys are making uneducated accusations on the "unit" method because you TRULY don't understand the logic behind them. In reality though-it's probably better since the mopre people taking their calls in the room means the more likely I get a worse fill on my stock!
Good luck!
If you were in their room- you would realize they use voalatility/pivot based stops.... so in essence a $50 stock trade would not be called with a $.50 stop loss...... a stock with a $25 price might though. An example is right now we are long DRI with a $1.20 stop...earlier in the week we were short dell with about a $.50 stop.
The bottom line is that the lower and tighter stops don't have to move as much to stop us out price wise- but they also don't have to move as much in our direction to get us the 2-1 we are lookinig for. You guys can bag it all you want, but it is the one site next to PT that has actually made me money consistently! I tried M-T lost money....tried alfatrading....lost money etc etc etc
You guys are making uneducated accusations on the "unit" method because you TRULY don't understand the logic behind them. In reality though-it's probably better since the mopre people taking their calls in the room means the more likely I get a worse fill on my stock!
Good luck!
If I have your permission- what I would like to do is post the actual results of the room call and my actual fills on the Position trading room to show that the 'units' do work. I will only post them here after a trade is closed in order to keep the integrity of the Position room in check. I would like to show these guys who constantly bag these services that a trader is making money in the real world....
Can I do that? I also do it for PowerTradesignals of which I am a subscriber.
Can I do that? I also do it for PowerTradesignals of which I am a subscriber.
"</b>They happen to think that in light of their concept, their trading philosophy based on risk/reward untis are better vehicle for reflection of results. I don't know why it's so hard for each given trader to see how he would do with his shares size. Why is it such a big issue, replacing units with shares? </b>"
Because any hypothetical measure allows the overlooking of real world factors like slippage, commissions, whether shares were actually available to short, etc. It also might tempt the operator to overlook a stop potentially being just triggered and then turning profitable and claiming a win. I have certainly seen this happen although not sprecifically in your room.
Trading an account removes any suspicion about front-running and timeliness of calls. It allows the customer to see how his order execution skills match up with those of the room operator, etc.
I believe that if any chatroom operator were convinced his room could produce relatively consistently profitable real trading records they would trade an actual account and publish the records. They would then have people beating down their doors because they would have proven they are the real deal.
The fact that none will leads me to believe that either they can't or they are scared that they would not be able to on a continuing basis. Therefore they produce hypothetical measures like units and make sure they are the scorekeepers rather than the market.
Because any hypothetical measure allows the overlooking of real world factors like slippage, commissions, whether shares were actually available to short, etc. It also might tempt the operator to overlook a stop potentially being just triggered and then turning profitable and claiming a win. I have certainly seen this happen although not sprecifically in your room.
Trading an account removes any suspicion about front-running and timeliness of calls. It allows the customer to see how his order execution skills match up with those of the room operator, etc.
I believe that if any chatroom operator were convinced his room could produce relatively consistently profitable real trading records they would trade an actual account and publish the records. They would then have people beating down their doors because they would have proven they are the real deal.
The fact that none will leads me to believe that either they can't or they are scared that they would not be able to on a continuing basis. Therefore they produce hypothetical measures like units and make sure they are the scorekeepers rather than the market.
Originally posted by dufferdon
<b>Because any hypothetical measure allows the overlooking of real world factors like slippage, commissions, whether shares were actually available to short, etc.</b>
Not really. One trader's fill doesn't mean others will get the same. Commissions and short availability? You don't want chat room operator to consider these factors too for each trader, do you? If stock was available for part of the room and was not for others, what does it prove or denies?
<b>Trading an account removes any suspicion about front-running and timeliness of calls. It allows the customer to see how his order execution skills match up with those of the room operator, etc.</b>
In reality it just opens whole new can of worms...
The rest of your post makes rounds again, allow me not to repeat myself. 8 private messages and e-mails I got today confirm my take: it's just about different opinions. 6 of them are in favor of my point of view and 2 are against. I am not trying to say that the most agree with me, we don't know the take of those who don't voice it. I am just making a point that we expressed our views, I am fine with agreement to disagree. Actually, even more than fine because this is first dialog of this kind that I remember that kept within limits of respectful conversation.
Once again, I am willing to answer any questions about internal mechanics of chat room operations.
Best regards,
Vad
newbie - your math is still off
Risk-based position sizing is hardly new and it's certainly nothing unique to the guys you're talking about - although apparently calling the "units method" has you believing it's something new that no one here understands.
The problem isn't with everyone else not understanding the issue. But it's apparently too arbitrary and meaningless that you're not completely clear about it.
Double check your numbers - you must be mixing concepts. You can't talk about "units" on one hand (which assume risk-based position sizing) and then arbitrarilly compare results on a dollar/share basis as if position sizes were fixed. You have to compute both the "units" results with the same position sizes as the $/share result. The issue in question isn't variable position sizing, it's the arbitrary performance measurement.
Everyone knows how risk-based position sizing works - it's not magic and traders have been doing it forever.
As previously shown, the result of your earlier example was a 35 cents/share average net GAIN - it is incorrect to construe a 20 cent/share loss by using incompatible arithmetic to justify that only "units" present the "truth".
It's not that people here don't understand this "units" BS, it's just that it's fundamentally obfiscation.
Return on initial capital and return on target risk capital are easily understood and easily comparable measurements and provide far more meaningful information than an arbitrary "units" - that's why they're standard comparative measures.
It's fairly simple - if an outfit has to dream up an arbitrary measure of their performance, it's only reasonable to wonder why - since it clearly has nothing to do with "truth".
Risk-based position sizing is hardly new and it's certainly nothing unique to the guys you're talking about - although apparently calling the "units method" has you believing it's something new that no one here understands.
The problem isn't with everyone else not understanding the issue. But it's apparently too arbitrary and meaningless that you're not completely clear about it.
Double check your numbers - you must be mixing concepts. You can't talk about "units" on one hand (which assume risk-based position sizing) and then arbitrarilly compare results on a dollar/share basis as if position sizes were fixed. You have to compute both the "units" results with the same position sizes as the $/share result. The issue in question isn't variable position sizing, it's the arbitrary performance measurement.
Everyone knows how risk-based position sizing works - it's not magic and traders have been doing it forever.
As previously shown, the result of your earlier example was a 35 cents/share average net GAIN - it is incorrect to construe a 20 cent/share loss by using incompatible arithmetic to justify that only "units" present the "truth".
It's not that people here don't understand this "units" BS, it's just that it's fundamentally obfiscation.
Return on initial capital and return on target risk capital are easily understood and easily comparable measurements and provide far more meaningful information than an arbitrary "units" - that's why they're standard comparative measures.
It's fairly simple - if an outfit has to dream up an arbitrary measure of their performance, it's only reasonable to wonder why - since it clearly has nothing to do with "truth".
The proof will be in the pudding right? That is what you guys are looking for..... so that is why I started the new thread..... That will either shut you guys up.... or it will shut me up. I'm the only one with the money at risk.... so let's drop the subject until the results are in.
On a final note- you still haven't said that in my example given- the guy who bought let's say 100 shares on each trade is STILL A NET LOSER!
IS THAT NOT CORRECT? Tell me? The guy who bought 100 shares on each trade is down $20 true or false? That is my point. See you in a month with the results.
The bottom line is a unit is different to every trader. I risk almost 1% on each trade. Each unit for me is $250.... if I take a loss-whether the stop is $1 away of $3.... I will lose 1 unit or $250. We take partial profits in the room near two units or 2-1 R/R. So when my trade shows an open equity of +$500 or two $250 units... I will sell half and bring my stop to B/E. That is all they mean by units. Last month following both moderators calls I would have been up $4750 risking 1 unit or $250 on each trade. If one was to risk $500 as their unit.... they would have been up $9500.
On a final note- you still haven't said that in my example given- the guy who bought let's say 100 shares on each trade is STILL A NET LOSER!
IS THAT NOT CORRECT? Tell me? The guy who bought 100 shares on each trade is down $20 true or false? That is my point. See you in a month with the results.
The bottom line is a unit is different to every trader. I risk almost 1% on each trade. Each unit for me is $250.... if I take a loss-whether the stop is $1 away of $3.... I will lose 1 unit or $250. We take partial profits in the room near two units or 2-1 R/R. So when my trade shows an open equity of +$500 or two $250 units... I will sell half and bring my stop to B/E. That is all they mean by units. Last month following both moderators calls I would have been up $4750 risking 1 unit or $250 on each trade. If one was to risk $500 as their unit.... they would have been up $9500.
newbie - apparently still a disconnect
EVERYONE understands risk-based position sizing - it's been done FOREVER. It's NOT unique to the guys you're talking about and it's NOT the issue.
Is a trader to makes two 1000 share traders and makes $1 on one and loses $2 on the other a net loser - of course.
However, variable position sizing was NOT being questioned. It was hiding performance behind arbitrary measurements instead of commonly accepted ones.
In the examples already covered - in one case a trader makes one "unit". In the other, he makes 35 cents/share traded. Position sizing mechanics are the same because there's NOTHING unique about them.
What's missing from the picture (and which "units" won't ever disclose) is what that performance really means. Example - these four trades are done - the first two open overlapped timeframes and the second two open overlapped timeframes:
Trade 1 - 1000 shares @ 50, stop at $1, net is +$2
Trade 2 - 500 shares @ 80, stop at $2, net is -$2
Trade 3 - 1000 shares @ 100, stop at $1, net is +1
Trade 4 - 500 shares @ 40, stop at $2, net is -$2
Note that in each case, the positions are sized based on initial risk of $1000 (which is presumed to be based on total capital).
According to the "units" method - you now declare that you're net +1 unit. That's ALL this meaningless measure provides.
However, using commonly accepted measures the person seeking comparative data finds (assumes 4:1 leverage):
Overall return of $1000 on average of $26,250 capital committed
Net return of $1000 on $4,000 initial target risk
Maximum capital committed $30,000
That of course gives traders far more information about the efficacy of a service/system/etc. than "hey, we're up X units".
So to be clear, meaningfulness of "units" as a performance measure was all that was being discussed. Not whether variable position sizing was better than fixed position sizing.
EVERYONE understands risk-based position sizing - it's been done FOREVER. It's NOT unique to the guys you're talking about and it's NOT the issue.
Is a trader to makes two 1000 share traders and makes $1 on one and loses $2 on the other a net loser - of course.
However, variable position sizing was NOT being questioned. It was hiding performance behind arbitrary measurements instead of commonly accepted ones.
In the examples already covered - in one case a trader makes one "unit". In the other, he makes 35 cents/share traded. Position sizing mechanics are the same because there's NOTHING unique about them.
What's missing from the picture (and which "units" won't ever disclose) is what that performance really means. Example - these four trades are done - the first two open overlapped timeframes and the second two open overlapped timeframes:
Trade 1 - 1000 shares @ 50, stop at $1, net is +$2
Trade 2 - 500 shares @ 80, stop at $2, net is -$2
Trade 3 - 1000 shares @ 100, stop at $1, net is +1
Trade 4 - 500 shares @ 40, stop at $2, net is -$2
Note that in each case, the positions are sized based on initial risk of $1000 (which is presumed to be based on total capital).
According to the "units" method - you now declare that you're net +1 unit. That's ALL this meaningless measure provides.
However, using commonly accepted measures the person seeking comparative data finds (assumes 4:1 leverage):
Overall return of $1000 on average of $26,250 capital committed
Net return of $1000 on $4,000 initial target risk
Maximum capital committed $30,000
That of course gives traders far more information about the efficacy of a service/system/etc. than "hey, we're up X units".
So to be clear, meaningfulness of "units" as a performance measure was all that was being discussed. Not whether variable position sizing was better than fixed position sizing.